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Tds on govt. companies

Bhaskar Yadav (Article) (55 Points)

20 April 2017

I am working with a Govt. organisations whos income is completely exempt u/s 10(26b) of Income Tax act .So my question is whether TDS of this organisation is required to be deducted???

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8 Replies

Riken Shah (43 Points)
Replied 20 April 2017

Dear Bhaskar,

As per the best of my knowledge, It is mandatory to Deduct TDS under the provisions of the ACT. If TDS is not deducted by you, The expense will be disallowed by 30% under sec 40(a)(1.a).

The company will later file its return and claim for claim. Hence it is advised to you to deduct TDS.

Note:The above answer is based on my interpretation. Hence it may be wrong.

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Rajesh (Student) (42 Points)
Replied 21 April 2017

no need to deduct tds when income of payee is exempt u/s 10

Bhaskar Yadav (Article) (55 Points)
Replied 21 April 2017

Dear Rakesh Sir can you please quote any section or notification for that ???

PRABIR PAUL (*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.) (1443 Points)
Replied 21 April 2017

If we focus on the provision of TDS then we can't able to find any tds provision on exempt income. TDS must be deducted on taxable income or that income which income must be included in TOTAL INCOME. So exempt income is not subject to tds as the exempt income is not subjest to income tax.....................

Jayprakash Kittusamy (Accounts Officer) (55 Points)
Replied 21 April 2017

Sir,

My Company has got Southern Railway Contract, for Job Work we want to Deduct TDS or Not.

Please help in this regard

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Bhaskar Yadav (Article) (55 Points)
Replied 21 April 2017

Sir i am not satisfied with your answer that tds is not required to be deducted on exempt income. an organization whos income is exempt have to obtain tds exemption certificate u/s 197 in order to get exemption

Rajesh (Student) (42 Points)
Replied 21 April 2017

if you have certificate of exemption under 10(26b) no need for tds as income tax s exempted as simple as that there are many cse laws too

tds is not an independent provisions they depend on taxability.

saurabh kumar (Tax Consultant) (348 Points)
Replied 22 April 2017

No TDS in case of sum payable to Govt./RBI/Corp. established by or under a central Act which is under any law for the time being in force exempt from income tax on its income or a mutual fund(specified u/s 10(23D).----------------as per sec 196 of income tax Act.